Humanitarian Finance: A Missed Opportunity for Reform at the Summit of the Future

Critical Questions by Marc CohenandMichelle Strucke

Published September 30, 2024

The United Nations hosted the Summit of the Future in New York on September 20-23. This high-level gathering was initiated by UN secretary general António Guterres and sought to "forge a new international consensus on how we deliver a better present and safeguard the future." According to the summit website, "Effective global cooperation is increasingly critical to our survival but difficult to achieve in an atmosphere of mistrust, using outdated structures that no longer reflect today's political and economic realities."

The summit was charged with producing an action plan, the Pact for the Future, intended to propose bold, transformational change in sustainable development and financing for development, as well as international peace and security and global governance. All of these are relevant to the urgent changes needed in the United Nations' management of the global humanitarian finance system, and yet humanitarian finance was not meaningfully included in its agenda or outcome. Humanitarian issues, despite the loss of life and property, regional spillover, and cost burden on affected and donor countries, were name-checked but not meaningfully integrated into the final document. Notably, a related commonsense proposal for an Emergency Platform that appeared in the zero draft, which would have established an automatic coordination platform for emergency shocks affecting multiple states, broadly defined, to include anything from a future pandemic or biological threat to a "black swan" event, was stripped out of the final document.

Q1: How is humanitarian finance broken?

A1: Since its establishment in the early 1990s, the United Nations' Office for the Coordination of Humanitarian Affairs (UNOCHA) has played a central role both in issuing global appeals for humanitarian funding and in coordinating the delivery of humanitarian assistance on the ground. Over the past decade, however, the rapid rise in the need for assistance has overwhelmed this system. According to UNOCHA's Financial Tracking Service (FTS), humanitarian funding requirements increased by nearly 90 percent between 2019 and 2023, rising from $29.8 billion to $56.1 billion. Alarmingly, the gap between requirements and actual funding also rose. While donors provided 59 percent of the required resources annually between 2014 and 2018, that figure fell to 54 percent between 2019 and 2023, and in 2023, actual aid was just 43 percent of requirements, although funding in dollar terms increased that year by nearly 9 percent to $56.09 billion.

Breaking down the aggregate humanitarian funding shortfall by sector and country reveals even larger gaps. In 2023, donors only provided 40 percent of the requirements for food security and health, 41 percent for water, sanitation, and hygiene (WASH), and 42 percent for protection. The early recovery sector, which seeks to make the crucial links between humanitarian and development aid, received a mere 19 percent.

It is also evident that not all crises are equal. In 2023, coverage of requirements in some crises dipped well below the global average of 43 percent: 41 percent in Yemen and the Democratic Republic of the Congo, 40 percent in Burkina Faso, 38 percent in Syria, 37 percent in Ethiopia, and just 35 percent in Haiti, where almost half of the population faced crisis-level acute food insecurity. Appeals for those six countries targeted a combined population of nearly 65 million people in need of assistance, many of whom received far less aid than needed or had to go without protection, food, water, and medicine.

Coverage in some other crises exceeded the global figure: 100 percent in the Occupied Palestinian Territory (OPT; most of the aid was provided before October 7), 72 percent in Ukraine, 62 percent in South Sudan, and 51 percent in Afghanistan. Nevertheless, in all but OPT, the assistance provided still fell short of the requirements. In these cases as well, not all sectors received the resources required: In Ukraine, for example, despite its elevated status as a foreign policy priority for the United States and NATO countries, donors provided just 39 percent of the needed aid for food security, and just over half for WASH. In OPT, although food security received more than 100 percent of the appeal, the figure for WASH was only 23 percent.

Each of these sectoral shortfalls and donor-chosen funding priorities impacts people affected by humanitarian crises who may receive limited aid for one critical or lifesaving area, such as food, but suffer from a lack of another, such as protection to keep them safe from gender-based violence. According to a study by the Inter-Agency Standing Committee, donor earmarks of funding can cause a loss of precious implementation time that may instead be spent on fragmented and duplicative reporting, missed opportunities to maximize cost efficiencies, and the inability to reallocate funds to urgent, unfunded priorities. This can ultimately drive implementers to lack the flexibility that is needed to respond to a dynamic crisis as it evolves precisely when they need flexibility the most.

Q2: What are the consequences of the chronic funding shortfalls?

A2: The failing humanitarian finance architecture has devastating consequences. UNOCHA annually estimates the number of people in need of assistance and then sets a target for the number of people it expects to reach via the annual appeals for aid that it coordinates. This estimate is based on a funding plan that reflects the capacity of the United Nations and its partners to reach people in need. UNOCHA's annual Global Humanitarian Overview indicates that the population in need of humanitarian assistance jumped by a whopping 157 percent between 2019 and 2023, from 132 million to 339 million people. During this same period, the number of forcibly displaced persons ballooned by more than 38 percent, from 79.5 million to 110 million. The number of people living in crisis-level acute food insecurity more than doubled, from 135 million to an all-time high of 282 million.

In 2019, UNOCHA targeted 71 percent of the 131.7 million people in need of assistance, leaving 38 million people out. By 2023, the target covered less than 68 percent of the 339 million people requiring assistance, excluding more than 100 million people in need of protection and emergency food, nutrition, water, and health assistance. This means a rise in readily preventable malnutrition, disease, gender-based violence, violence against children, and death.

For example, in Yemen, which received only 41 percent of the required humanitarian assistance in 2023, over 19,000 people have been killed and millions more forced to flee their homes. More than half the population is in need of humanitarian assistance. Millions face severe acute food insecurity, and almost half of the children under the age of five experience chronic malnutrition, with 21 percent of them suffering severe stunting. Inadequate funding meant that the UN World Food Programme (WFP) had to pause food assistance for 9.5 million people between November 2023 and the first quarter of 2024 and malnutrition services for 2.4 million people in early 2024. The healthcare system is on the verge of collapse. Hospitals lack essential supplies, and many healthcare workers have gone without salaries for years. Outbreaks of cholera, diphtheria, and other diseases pose a constant threat.

Humanitarian crises affect men and women differently. According to UNOCHA, there is evidence that women experience gender-based violence at higher rates in emergencies, and a crisis often worsens gender inequalities. According to the World Bank, adolescent girls in conflict situations are 90 percent more likely to be out of school. Preventable maternal mortality occurs in humanitarian contexts at a rate of 60 percent. Over 500 women and adolescent girls die daily from pregnancy and childbirth complications in such situations.

Q3: What is driving the explosive growth in the need for humanitarian assistance?

A3: Violent conflict, often in combination with weather extremes and economic shocks, is the main driver of the rising level of humanitarian need, forced displacement, and acute food insecurity. According to the Global Humanitarian Assistance Report 2023, conflict is the "most prevalent dimension" of humanitarian need, with nearly 90 percent of all people requiring assistance living in countries experiencing high-intensity conflict. And the world has become more violent in the present decade.

Furthermore, many conflicts have sparked humanitarian crises that have endured for years or even decades. For example, Myanmar has experienced continuous conflict since independence in 1948, and fighting has raged in Afghanistan since 1980. The Democratic Republic of the Congo has seen wars for most of the past 30 years.

UNOCHA attributes the second greatest driver of increased humanitarian need as the global climate crisis, followed by economic issues, all of which overlap to create increased vulnerabilities and humanitarian need. Humanitarian need is increasingly concentrated in areas in which conflict and climate intersect, with the International Rescue Committee observing that 69 percent of all humanitarian need and 62 percent of global displacement are concentrated in the 16 countries facing both ongoing conflict and climate vulnerability. And climate change is responsible for a 45 percent increase in internal displacement in a single year from 2021 to 2022.

Q4: How are public sector donors responding?

A4: Although private actors (such as foundations, companies, and individuals) have increased their contributions to humanitarian assistance in recent years, governments and public international organizations continue to provide more than 80 percent of the resources. According to UNOCHA data, over the past five years, the U.S. government has consistently provided the largest share of aid in response to appeals, funding on average nearly 36 percent of all humanitarian assistance annually. Germany, the second largest humanitarian donor, has provided an average of about 12 percent of the total. The other leading donors during this period include the European Commission, Japan, Saudi Arabia, and the United Kingdom. France provided an average of 1.4 percent during the five years and only ranked among the top 10 donors in 2023. Russia and China, the other permanent members of the UN Security Council-the countries with special responsibilities for global peace and security-provided negligible amounts of aid in response to UN-coordinated humanitarian appeals.

The critical flaw in the humanitarian finance system is its voluntary character. The United Nations appeals to donors for resources for every humanitarian crisis, but it is entirely up to the donors whether they provide the funds at all, and if they do, it is their choice as to which countries and sectors they will fund. Donor governments also do not always follow through on their pledges, meaning that the funding raised at widely publicized donor-pledging conferences around the world does not always materialize into tangible aid for people in need. This contrasts sharply with the financing of the regular UN budget, peacekeeping operations, and international tribunals through mandatory assessments of the member states. Even the International Commission for the Conservation of Atlantic Tunas has the power to assess the mandatory contributions of its member states.

The creation of the UN Central Emergency Response Fund (CERF) in 2005 has provided resources for both rapid response and underfunded emergencies through the availability of a ready cash reserve. However, donors have only provided CERF with $9 billion since its inception, compared to a humanitarian funding shortfall of $145 billion over the past decade. Moreover, CERF contributions, like humanitarian finance generally, remain purely voluntary.

Q5: How did the Pact for the Future fare in addressing the chronic funding shortage to address humanitarian crises globally?

A5: In the Pact for the Future, the world's nations paid lip service to the financing gap for humanitarian crises by committing to "significantly increase financial and other forms of support to countries and communities facing humanitarian emergencies, including host communities, inter alia, by scaling up timely and predictable funding and innovative and anticipatory financing mechanisms, as well as by strengthening partnerships with international financial institutions in order to prevent, reduce and respond to humanitarian suffering and assist those in need." As elsewhere in the document, they did not provide an explanation for how this might be achieved, or what specific, concrete actions they would take to ensure that humanitarian funding is adequate, predictable, and timely.

What should they have agreed? Redoubled efforts to resolve the world's conflicts on a just and lasting basis should have featured prominently in the Pact for the Future. It also would have been essential that the pact propose ways to overcome the growing gap between exploding humanitarian requirements and the anemic levels of assistance provided. This is particularly important since the last UN high-level convening on humanitarian finance was in 2016, following the World Humanitarian Summit. Also, because violent conflict and climate change often interact in complex ways, humanitarian action must better adapt to tackle this deadly nexus as part of its standard operating procedures.

The resources to fund humanitarian assistance are available. The 10-year humanitarian financing gap of $145 billion is roughly equivalent to Amazon's third-quarter revenues in 2023. The combined 2022 revenue of the 100 largest arms-producing and military services companies was $597 billion, or more than enough to cover the deficit in humanitarian finance four times over. Important global tax reform discussions that were underway at the summit and in other UN forums may result in increased public resource mobilization from these substantial private revenues. And public spending on other, prioritized areas has continued to increase; global defense spending increased to more than $2 trillion annually for the first time in 2022.

So, the real question is whether there is the political will to provide the funds to meet humanitarian needs. As the leading aid provider, the United States is well placed to play a lead role in developing consensus on a new approach to mobilizing the necessary finance. As the summit concluded on September 23, the Pact for the Future failed to take the provocative step of calling for mandatory contributions from all UN member states to fund humanitarian assistance. Such a far-reaching reform would have guaranteed a floor-not a ceiling-for humanitarian funding on a sustainable basis and gone a long way toward overcoming the current chronic and growing financial gaps. Of course, additional voluntary contributions will remain necessary when large-scale unforeseen crises break out. But the summit had a real opportunity to propose the needed radical change in the humanitarian finance system, and it missed it.

Marc J. Cohen is senior associate (non-resident) with the Humanitarian Agenda at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Michelle Strucke is director of the Humanitarian Agenda and the Human Rights Initiative at CSIS.

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